Essential bookkeeping tips and advice
Bookkeeping is the process of recording all the financial transactions in your business. It’s an essential component of accounting, and accountants need accurate bookkeeping to reliably analyse the financial health of a business.
Accurate and regular bookkeeping is also crucial to help you meet HMRC deadlines, and make sure you operate in a tax efficient way. A comprehensive set of accounting records is also useful if you need to look for funding – any potential lenders or investors will inevitably ask to see them!
Good organisation is essential for accurate bookkeeping
Keeping on top of your bookkeeping will help you keep track of cash flow in your business. Understanding what’s coming in and going out allows you to spot trends, make any necessary changes, and plan ahead.
Use bookkeeping software to maintain your financial records
OK, we like to talk about bookkeeping software, but with the introduction of Making Tax Digital, it’s probably best to get to grips with it as soon as possible.
Update your records as often as possible
It will save you hours of time, trying to make sense of things later! Look out for tools that can help you manage without too much manual intervention – like bank feeds for example.
Know your bookkeeping dates
Keep an eye on invoice payment dates (including when customers owe you money by!), tax return submission deadlines, and for paying your tax bill.
Record all your expenses
You’ll only pay tax on your profits, not on your total income, so make sure that you account for every possible allowance expense! And yes, make sure you snap those receipts too.
Plan for spending
Again, spotting those all-important trends will help you plan ahead for times when you really must have cash in the bank to pay the bills. Ideally though, you’ll remember to keep some surplus, in case of emergencies – or even to fund growth!